Some companies are taking the bull by the horns and driving this pandemic to profit, Jim Cramer told his Mad Money viewers on Tuesday. Cramer said that through a combination of ingenuity and a bit of luck, many of this quarter’s outstanding stocks are about to rise again next quarter.
Many of this quarter’s biggest winners are now household names. Actions like Zoom Video (ZM) – Get reportNetflix (NFLX) – Get reportPayPal (PYPL) – Get reportTesla (TSLA) – Get report and apple (AAPL) – Get report They were among the biggest winners in the second quarter, but they weren’t the only ones. Cramer said he is betting on Regeneron Pharmaceuticals (REGN) – Get report being a leader in the race for a vaccine while Nvidia’s chips (NVDA) – Get report It will continue to drive many of our most popular technology trends.
But beyond these names there are a host of lesser-known companies that are helping small businesses make the transition online. Cramer liked Shopify (STORE) – Get reportTwilio TWLO, quickly (FSLY) – Get reportEtsy (ETSY) – Get reportWix (WIX) – Get report and Adobe Systems (ADBE) – Get reportAll of which has increased as online trading became essential.
Finally, Cramer called Lululemon Athletica (LULU) – Get report as a big winner in the retail sector, after the company announced its first major acquisition on Tuesday morning.
Executive decision: ConAgra brands
In his first “Executive Decision” segment, Cramer spoke with Sean Connolly, President and CEO of ConAgra Brands. (CAG) – Get report, the packaged food maker that just released a profit of nine cents a share.
Connolly said that consumers are not only stocking their groceries, but are rediscovering the joys and values of eating at home with their families. We have all been conditioned to eat in restaurants, he said, but now that we are all financially limited, people are rediscovering the ConAgra brands.
Among this quarter’s highlights was a 62% increase in Chef Boyardee, a brand that Connolly said stands for quality and value. Duncan Hines was strong too, as millennials and Gen-X consumers rediscovered baking at home.
Connolly said frozen food is the perfect food for this environment, as it is restaurant quality but still easy to prepare.
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Entire industries, extinction for small business
In his “No-Huddle Offense” segment, Cramer said that with the end of government assistance programs, we urgently need another round of stimulus to save our small business economy.
Restaurants are a precarious business, even in the best of times, Cramer said, but in our new world, if you don’t have a drive-thru, it’s almost impossible to make a profit. The same with retail. Only a handful of retailers will be able to move into an omnichannel world, while the rest will wither and die without being able to pay the rent. Large retailers will survive; They are considered essential, Cramer said, but all the others are not.
There are entire industries that could disappear. Health clubs will disappear as only the largest chains can afford the new cleaning requirements. Then there are all the countless businesses that support movie theaters and sporting events. All of these areas favor only the largest operator, while the small ones will disappear without additional assistance.
Executive decision: Crown Castle International
For his second “Executive Decision” segment, Cramer also spoke to Jay Brown, President and CEO of Crown Castle International. (CCI) – Get report, the cell tower operator preparing for the 5G wireless revolution.
Brown explained that the shared infrastructure model allows operators to deploy services faster and save up to 50% on the construction of their own towers. Once the towers are built, they require little maintenance, he said, and multiple operators and services can share the same tower, increasing Crown Castle’s profit margin.
When asked about Sprint’s merger with T-Mobile (TMUS) – Get reportBrown said the combined company will continue to spend heavily on the launch of 5G, which will more than make up for any revenue loss by combining players number three and four. He was also optimistic on Dish Network (PLATE) – Get report, which has also committed to a national rollout of cellular services beginning in 2021.
Finally, Brown commented on recent movements for social change. He said that our way of life is based on equality for all and the inequalities that we are seeing are bad for all.
Executive decision: Dave Cote
For his final “Executive Decision” segment, Cramer registered Dave Cote, former CEO of Honeywell. (HON) – Get report, who has just published a new book entitled Win now, win later.
Cote said he drew many lessons from his time at Honeywell. He said that success is often about achieving two opposite things at the same time. You generally cannot have profit margins and market share, growth and control. But great CEOs know how to balance short-term earnings with the company’s long-term needs.
Cote also said that being a successful CEO requires intensity. Too many CEOs fall victim to their calendar, letting the urgent get in the way. CEOs should always take the time to think, plan, and see the big picture.
Ray round
Here is what Jim Cramer said about some of the actions that callers offered during the Mad Money Lightning round on Tuesday night:
Berkshire Hathaway (BRK.B) – Get report: “This is not a good time for Berkshire. I will never bet against Buffett, but this is not the right portfolio for this time.”
Sirius XM Radio (SIRI) – Get report: “I think you agree with that.”
Nokia (NOK) – Get report: “I think there are many good things coming for Nokia.”
Beyond meat (BYND) – Get report: “They are lowering prices to gain market share. I would buy more as it falls.”
Inseego (INSG) – Get report: “Not as good as Marvell Technology (MRVL) – Get report or Skyworks solutions (SWKS) – Get report, no, but it’s a 5G play. “
Ford Motor (F) – Get report: “I am a type of balance and they have a bad one”.
Vaxart (VXRT) – Get report: “This is a great long shot. Sometimes long shots come, but generally not.”
Anheuser-Busch InBev (OUTBREAK) – Get report: “I don’t think it’s good. I’d rather see you at PepsiCo (ENERGY) – Get report or constellation marks (STZ) – Get report“
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At the time of publication, Cramer’s Action Alerts PLUS had a position at AAPL, NVDA, PEP.
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